Cashback Calculation Rules
Understand exactly how cashback amounts are calculated
RewardsPro uses a consistent formula to calculate cashback on every order. Understanding these rules helps you configure tiers effectively and explain rewards to customers.
The Cashback Formula
Cashback Amount = (Subtotal - Discounts) × Cashback RateVariables Explained
Subtotal
Sum of line item prices
$150.00
Discounts
Applied discount codes/automatic discounts
-$20.00
Cashback Rate
Customer's tier percentage
5%
Cashback Amount
Final credit earned
$6.50
Calculation Example
Order:
Products: $150.00
Discount code: -$20.00
Shipping: $10.00
Tax: $12.00
Order Total: $152.00
Calculation:
What's Included
✅ Included in Calculation
Product prices
Base price of items
Variant prices
Size, color variations
After discounts
Calculate on discounted price
Bundle products
Full bundle price
Pre-order items
When payment collected
❌ Excluded from Calculation
Shipping costs
Not product value
Taxes
Government fees
Tips
Not merchandise
Gift cards
Already a stored value
Excluded products
If configured
Discount Handling
Order-Level Discounts
Discounts that apply to the entire order:
Percentage off (e.g., 20% off)
Fixed amount off (e.g., $25 off)
Free shipping (no effect on cashback)
Calculation:
Item-Level Discounts
Discounts that apply to specific items:
Sale prices
Buy X Get Y promotions
Automatic discounts
Calculation:
Stacked Discounts
When multiple discounts apply:
All discounts are subtracted
Cashback calculated on final amount
Tier Rate Application
Finding the Rate
Identify the customer
Look up their current tier
Get the tier's cashback percentage
Apply to eligible amount
Tier at Time of Order
Important: Cashback uses the tier at order time, not current tier.
Example:
Customer was Silver (3%) when ordering
Upgraded to Gold (5%) the next day
Cashback on that order = 3% (Silver rate)
This ensures:
Accurate historical records
Fair tier progression
No retroactive changes
Edge Cases
Zero Cashback Scenarios
No cashback is awarded when:
Guest checkout
$0 (no customer account)
No tier assigned
$0 (assign default tier)
All items excluded
$0 (nothing eligible)
Below minimum order
$0 (if threshold set)
Zero subtotal
$0 (free order)
Rounding
Cashback is rounded to 2 decimal places:
$6.504 → $6.50
$6.505 → $6.51
$6.506 → $6.51
Standard banker's rounding is used.
Multi-Currency
For stores with multiple currencies:
Order placed in customer's currency
Converted to store currency (if different)
Cashback calculated in store currency
Credited in store currency
Example:
Product Exclusions
Excluding Specific Products
Some products may not earn cashback:
Gift cards
Donations
Service fees
Sale/clearance items (optional)
Configuration:
Go to Settings → Cashback Rules
Add products or collections to exclude
These items won't count toward cashback
Excluding Collections
Entire collections can be excluded:
Create "No Cashback" collection
Add products to it
Configure exclusion in settings
Order Scenarios
Standard Order
Discounted Order
Partial Exclusion
Mixed Currency
Verifying Calculations
In Order Details
Each processed order shows:
Order subtotal
Discounts applied
Tier at time of order
Calculated cashback
Any exclusions
In Transaction History
Customer ledger shows:
Cashback amount
Reference to order
Tier information
Timestamp
Audit Trail
For disputes:
Check order total and discounts
Verify tier at time of order
Check for excluded products
Recalculate manually if needed
Best Practices
Setting Rates
Entry
1-2%
Accessible reward
Mid
3-4%
Meaningful upgrade
Upper
5-6%
Strong incentive
Top
7-10%
VIP treatment
Margin Consideration
Ensure cashback is sustainable:
Communication
Help customers understand:
How cashback is calculated
What's included/excluded
When credit is issued
How to check their balance
Last updated